Costly self-insurance of rights offerings

• المؤلفون الرئيسيون: DUONG, Truong Xuan, SINGH, Rajdeep, TAN, Eng Joo
• التنسيق: text
• اللغة: English
• منشور في: Institutional Knowledge at Singapore Management University 2015
• الموضوعات: rights; paradox;failure; seasoned equity offerings; Corporate Finance
• الوصول للمادة أونلاين: https://ink.library.smu.edu.sg/lkcsb_research/5314

We study how the underwriting decision of an equity rights offering is affected by the risk of offering failure. Firms can reduce failure risk by getting underwriting or by self-insuring through subscription price discounts and subscription precommitments. Self-insurance is generally regarded to be...